Client Alerts | Shefsky & Froelich - Lawyers with Real Imagination

What the Health Reform Bill Means for Small Businesses

March 25, 2010

The health-care overhaul means big changes for many small businesses. Through a combination of penalties, tax credits and purchasing pools, the legislation aims to boost insurance coverage for U.S. workers. How this legislation will affect businesses depends in large part on their size.

Here are the basics:
• Beginning in 2014, organizations with more than 50 employees that don’t offer affordable coverage will pay a penalty starting at $750 a year per full-time worker; a proposal offered by the House, which still requires Senate approval, would raise that penalty to $2,000;
• Employers with 50 or fewer employees would be exempt from these penalties, while organizations with more than 200 workers would be required to enroll workers automatically into health-insurance plans offered by the employer; employees can opt out of these plans;
• For tax years 2010 through 2013, organizations with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees would receive a tax credit that phases out as firm size and average wage increase;
• Beginning in 2014, eligible small businesses that purchase coverage through new state exchanges can also receive a tax credit for their contribution toward the employees’ health-insurance premium;
• The legislation calls for the creation of state-based exchanges through which individuals and small businesses can purchase health coverage.

A few things to note—first, many of the provisions won’t kick in until 2014, and the final rules could still be changed by amendments that will now be considered by the Senate. Second, a package of diverse amendments addressing elements of the Senate bill that the House wanted changed will now be voted on in the Senate under reconciliation rules that require only a simple majority.

The immediate effects of the health overhaul for small businesses include:
• By no later than 2014, states will have to set up Small Business Health Options Programs (“SHOP EXCHANGES”), where small businesses will be able to pool together to buy insurance;
• For the next four years, until the SHOP EXCHANGES are set up, businesses with 10 or fewer full-time equivalent employees earning less than $25,000 a year on average will be eligible for tax credit of 35% of health insurance costs;
• Companies with between 11 and 25 workers and an average wage of up to $50,000 are eligible for partial credits;
• Insurers will no longer be able to set rates or exclude coverage based on pre-existing conditions, and can vary premiums only by geographic location, age, and tobacco use;
• Going into effect immediately: a ban on lifetime limits on coverage, and on rescission (canceling policies already issued) except in cases of fraud;
• So-called “Cadillac” plans costing more than $10,200 a year for individuals or $27,500 for family coverage (not counting dental and vision plans) will be subject to a 40% tax on the portion of the cost that exceeds the limit.

If the House amendments recently approved pass the Senate intact under the reconciliation process, some other small business provisions will change:
• Part-time employees would be counted toward the 50-employee minimum on prorated basis based on hours worked, bringing more small businesses into the group required to provide coverage;
• The $750-per-employee penalty for not providing insurance would rise to $2,000;
• The Cadillac tax would be delayed until 2018 and apply only to the most expensive plans;
• Individuals earning more than $200,000 a year, or couples earning $250,000 or more, would pay a 3.8% surcharge on investment income.

Please contact Judith S. Sherwin or Kathleen F. Howlett if you have any additional questions or concerns.

Pursuant to regulations governing practice before the Internal Revenue Service, unless expressly stated otherwise, any tax advice contained herein cannot be used, and is not intended to be used, by a taxpayer for (i) the purpose of avoiding tax penalties that may be imposed on the taxpayer under the Internal Revenue Code or (ii) the promotion or marketing of any tax-related matter or program.

Client Alert - Employee Treatment of Owners in a Limited Liability Company

February 24, 2010

For federal income tax purposes, a person may not be treated as both a “member” and an “employee” of a limited liability company (an “LLC”). This client alert discusses: (a) the alternatives that may be used to award LLC membership interests to an individual while preserving the ability to treat the individual as an employee of the LLC; and (b) the benefits that may be provided to an employee that are unavailable to a member who provides services to the LLC.

Except where otherwise noted, references to an LLC are to an LLC with more than one member that is taxable as a partnership for federal income tax purposes. If an individual owns 100% of the equity interests in an LLC that operates an active business, the income of the business generally must be reported by the owner on the owner’s individual income tax return as self-employment income from a sole proprietorship.

EXECUTIVE SUMMARY

Treatment as an Employee
- A member in an LLC that provides services to the LLC (a “service member”) may not be treated as an employee for federal income tax purposes. Consequently, the service member will not receive a W-2 reflecting the service member’s wages paid by the LLC but instead will have such compensation reflected in a K-1 as a “guaranteed payment.”
- A service member must pay both the employee and employer portions of FICA taxes (including OADSI and Medicare payroll taxes). The effective rate on the combined FICA taxes is 15.3% on compensation up to a wage base cap of $106,800 (as adjusted) and 2.9% on compensation above $106,800. The service member may deduct 50% of any FICA taxes paid.
- Three alternative structures may be available to permit individuals to own interests in an LLC and to be treated as employees of the LLC for federal income tax purposes: (i) use of an employee leasing company; (ii) formation of individually owned S corporations; and (iii) ownership through a tiered LLC structure.

Employee Fringe Benefits
- Certain employee fringe benefits that are excludible from the income of an employee are includible in the income of a service member.
- With respect to service member income, certain items are deductible individually by the service member, certain items are deductible subject to certain limitations; and certain items are not deductible.
- A service member may not be a participant in a “cafeteria plan” sponsored by the LLC.

Treatment as an Employee
A member in an LLC that provides services to the LLC (a “service member”) may not be treated as an employee for federal income tax purposes. Payments of amounts that are in the nature of “wages” are classified as “guaranteed payments” to a service member. Guaranteed payments are reported to the service member on the K-1 issued by the LLC (and are deductible by the LLC) and must be treated as self-employment income by the service member for federal income tax purposes. Self-employment income is subject to FICA tax, which has two components, OASDI and Medicare payroll taxes. OASDI payroll tax is owed at a rate equal to 12.4% on the first $106,800 (the 2010 threshold, which generally increases each year based on an average wage escalation factor) of self-employment income, and Medicare payroll tax at a rate equal to 2.9% on all self-employment income without any threshold limit (with 50% of the aggregate FICA payroll tax paid treated as paid by an “employer” and therefore deductible as a business expense). Because the LLC is not obligated to pay the “employer” half of FICA with respect to a “guaranteed payment” to a service member, the LLC may make an additional payment to the service member equal to the FICA payroll taxes the LLC would owe if the service member had been permitted to be an employee. The service member may deduct these amounts as the “employer” portion of FICA taxes, putting the LLC and the member in the same economic after-tax position as wages paid to an employee who is liable for only one-half of the FICA taxes.

For example, assume that an individual is paid $50,000 as compensation in a year. If the individual is treated as an employee, then the individual will be required to pay $7,650 in aggregate FICA payroll taxes (which will be withheld by the employer). The employer also is required to pay an additional $7,650 as the “employer” portion of FICA taxes (increasing the total amount of payments by the employer to $57,650), and the employer may deduct these amounts as business expenses. In contrast, if the individual is a service member of an LLC (rather than an employee), then the individual is required to pay the entire $15,300 in FICA taxes and may report $7,650 as a deductible expense on the individual’s federal income tax return (as the “employer” portion of FICA taxes). If the LLC pays the individual an additional $7,650 (increasing total compensation to $57,650), the LLC may deduct this additional amount as a “guaranteed payment.” In either case, the LLC makes total payments equal to $57,650 and has total deductions equal to $57,650. As an employee, the individual has net cash of $42,350 (ignoring income tax obligations and after payment of $7,650 as the “employee” portion of FICA taxes) and has net income equal to $50,000. As a service member, the individual has net cash of $42,350 (ignoring income tax obligations and after payment of $15,300 as the “employee” and “employer’ portions of FICA taxes) and has net income equal to $50,000 ($57,650 minus the deduction of $7,650 for the “employer” portion of FICA taxes). Thus, the individual also has the same net after-tax position in either case.

In addition to the obligation to pay the “employer” portion of FICA payroll taxes, a service member may not be eligible for “W-2” income tax withholding treatment. The member must file quarterly estimated tax payments with respect to both federal income taxes and FICA payroll taxes to avoid penalties related to taxes owed for the year. While avoiding withholding might be beneficial to certain “employees” of the LLC, most individuals prefer the convenience of regular income tax withholding rather than saving a portion of each check and paying an estimated amount four times a year, especially if the member receives a relatively low level of compensation from the LLC.

In addition to guaranteed payments, a service member must treat all allocations of ordinary income from the LLC (but not capital gain) as self-employment income. Thus, if the LLC has net business income (i.e., income from operations in excess of all deductions and expenses, including the deduction for any guaranteed payments), the service member’s share of this income is treated as self-employment income. If the service member otherwise has compensation income, including guaranteed payments from the LLC in excess of the wage base cap described above ($106,800, as adjusted annually), then this treatment only increases the members taxes by the 2.9% Medicare tax (50% of which is deductible, reducing the effective tax rate). On the other hand, for a lower-wage service member, these additional income allocations are subject to both the 12.4% and 2.9% tax provisions. These additional taxes on allocations of ordinary business income might be avoided entirely through the alternatives discussed below.

An LLC might use one of three alternative strategies to permit all service providing owners to be classified as employees for federal income tax purposes:

Alternative 1 – Employee Leasing Company. The first approach involves forming a separate employee leasing company to employ the workers who own equity interests in the LLC and lease these workers to the LLC. The leasing company generally is taxed as a C corporation, but the payments to the leasing company are designed to minimize taxable income to the leasing company by closely matching the leasing company’s expenses (generally limited to wages and benefit payments such as health insurance premiums), resulting in little (or when taking the most aggressive tax position, zero) income tax owed by the leasing company. Certain states, however, have expressed objections to this approach (or even prohibit this structure altogether). In addition, this approach does not eliminate completely the risk that income allocated to members that provide services to the LLC must include all ordinary income allocations as self-employment income.

Alternative 2 – Separate S corporations. Under this alternative, each member of the LLC that provides services to the LLC holds the membership interests through an S corporation owned 100% by the member. The service provider may be an employee of the LLC because the S corporation is treated as the member rather than the individual. This structure requires the creation of multiple S corporations which are subject to annual filing fees. In addition, a member no longer is able to deduct certain types of loss allocations (generally losses resulting from guaranteed debt or qualified nonrecourse indebtedness on real property) because the losses flow through the S corporation.

Alternative 3 – Tiered LLC Structure. The final alternative involves admitting the individuals who provide services to an LLC (the “Operating LLC”) as members of a separate LLC (the “Investment LLC”). Under this structure, the Investment LLC owns membership interests in the Operating LLC rather than the service members owning membership interests in the Operating LLC. The Operating LLC and the Investment LLC each will be treated as a separate partnership for federal income tax purposes. This structure generally is available only if the Operating LLC has separate investors that do not provide services to the Operating LLC. The members of the Investment LLC can be employees of the Operating LLC because they are treated as “partners” in the Investment LLC rather than as “partners” of the Operating LLC which employs them. The Investment LLC should have a separate business purposes (i.e., a purpose other than avoidance of federal income tax) for its existence to justify its formation as a separate partnership for federal income tax purposes. Generally, the desire to centralize the management of the interests owned by these employees is sufficient business justification for the structure. If available, this alternative avoids the limitations of the other alternatives (i.e., the disfavor of leasing companies by states under Alternative 1 and the inability to take certain losses, as well as the cumbersome structure and cost of multiple S corporations, under Alternative 2).

Employee Fringe Benefits

Income Inclusion for Certain Employee Fringe Benefits
In general, a service member in an LLC cannot exclude from income amounts paid on behalf of the member as follows:
- amounts paid under an accident and health plan;
- amounts paid by an employer to an accident and heath plan;
- up to $50,000 of group-life insurance on an employee’s life; and
- meals or lodging furnished for the convenience of an employer.

In contrast, amounts paid by the LLC with respect to these fringe benefits on behalf of an employee are excludible from the employee’s income. With respect to health insurance, deductions available to the service member on the member’s individual income tax return generally offset this income, putting the service member in the same net after-tax position as an employee. Other fringe benefits, however, may be non-deductible or deductible subject to certain limits (such as the limitations imposed on miscellaneous itemized deductions). Thus, the service member might not be in the same after-tax position as an employee with respect to payments for these fringe benefits.

Participation in a Cafeteria Plan
A service member may not participate in a “cafeteria plan” (also commonly known as flex-spending accounts) because the member is not an employee of the company. Specifically, the service member cannot use “pre-tax” dollars to pay for expenses covered by the company’s cafeteria plan, such as day care expenses and non-reimbursed health care expenses. The service member generally will not be entitled to any deductions on the member’s individual income tax return with respect to these expenses. Thus, the service member generally will not be in the same after-tax position as an employee with respect to the items covered by a cafeteria plan.

Please contact Richard E. Aderman or Michael J. Schaller if you have any additional questions or concerns.

One Year Repeal of Federal Estate & Generation Skipping Transfer Taxes

January 11, 2010

On January 1, 2010, a major tax event occurred—the one year repeal of Federal estate and generation-skipping transfer (“GST”) taxes. Repeal, in theory, means no estate or GST taxes will be assessed against the estates of 2010 decedents.

For those individuals unlucky enough to die this year, this legislative quirk might result in a huge tax savings, but also some potentially significant problems as discussed below. In 2009, the Federal estate and GST tax exemptions were $3.5 million per person. Assuming no marital or charitable deductions, assets in excess of these exemptions usually were taxed at a combined State and Federal tax rate between 45% and 52%. With no estate tax, this onerous tax is of course eliminated.

This repeal also is accompanied by several other changes, including:
- Gift Taxes. The law currently in effect for 2010 reduces the tax rate on taxable gifts from 45% to 35% for gifts made this year. These taxes apply to taxable gifts in excess of the $1 million lifetime gift tax exemption, which remains in effect.

- Income Tax Basis. Any assets inherited from 2010 decedents will be subject to less advantageous basis rules than those available under the old law. However, planning opportunities do exist to minimize the adverse effects of these new rules.

- 2011 Estate Tax at Higher Levels. If Congress fails to act in 2010, the Federal estate and GST taxes will be reinstated in 2011, with an exemption of only $1 million per person. Any assets in excess of the $1 million exemption generally will be subject to taxes at a combined State and Federal estate tax rate up approximately 63% for 2011 and later years.

What Will Happen Next?
There is significant uncertainty regarding what, if anything, Congress might do next. At this time, Congress has stalemated and even has failed to issue a joint letter of intent indicating how, if at all, it plans to tackle the estate tax issue. As such, it is impossible to predict what will or will not happen and when.

While no one has a crystal ball, we believe there is a good likelihood that Congress may pass legislation in 2010 reinstating the gift, estate and GST taxes for this and later years, with tax rates and exemptions at or around the 2009 levels. It is also possible that any legislation might be retroactive to January 1st, eliminating the current “no-tax window.” If the tax is retroactively reinstated, we can expect the constitutionality of retroactive application of the tax laws to be litigated for several years.

What Can Be Done?
Given a possible window with no estate tax, but also significant uncertainty, should or can any taxpayer plan for this now? Do documents need to be changed? That depends on several complex factors, including age, mortality risk, size of the estate, desire for planning for all contingencies and what a person’s documents currently state. Given this complexity, each individual’s situation should be analyzed and discussed.

Here are a few considerations:
- Formula Allocations May be Askew. In most cases, estate plan documents contain a flexible formula responsive to changes to the estate and GST tax exemptions and that will minimize those taxes. However, some formulae should be revised to accommodate the total non-existence of estate and GST taxes.

Although dying during this window of complete repeal may seem remote or unlikely, ignoring this possibility could result in assets being distributed in an unintended manner. In some cases, those unintended results could even leave intended beneficiaries with nothing. For example, if a person leaves assets both to a spouse and children from a prior marriage, the current allocation formula may no longer work as intended, by either leaving too much to a spouse and too little for children, or vice versa.

- Income Tax Basis Planning. If a person has low basis assets, in some cases income tax planning should be considered. Under the law this year, upon a taxpayer’s death assets will not be “stepped up” to their fair market value. Instead, the basis of assets passing to beneficiaries will be the lower of the decedent’s basis in the assets or their fair market value at the time of death.

However, there is a key exception to this new “carryover basis” rule: the representative of an estate can increase low basis assets to the extent of $1.3 million and, for married individuals, by an additional $3 million for assets passing to a surviving spouse or to a qualified trust for a surviving spouse.

- Multi-generational Planning. The absence of any GST taxes also may mean that an individual can make current transfers to grandchildren (outright or in trusts) that would have otherwise caused a GST tax. This suggests certain planning opportunities to reduce or eliminate estate and GST taxes when they are reinstated in 2011, or earlier if Congress enacts legislation this year.

- Contingent Planning for a Non-tax Environment. In some cases, it may be desirable to amend documents to provide for the contingent distribution of assets without regard to estate and GST taxes. For example, assets that would have been left to a surviving spouse in order to qualify for the estate tax marital deduction might instead be directed outside the surviving spouse’s taxable estate.

We would be pleased to answer your questions or discuss the applicability of the current estate and GST tax scenario to individual situations.

If you have any questions on this, please contact Ira S. Neiman or Michael R. Friedberg.

Client Alert: Taxation of Carried Interests

December 14, 2009

We previously advised our clients that Congress was considering legislation that would change the tax treatment of so-called “back-end interests” or “profits interests” or “carried interests.” These types of interests generally are held by the general partners or managers of investment partnerships and limited liability companies, including real estate investment syndications and other investment funds, as a method of participation in the performance of the fund after investors receive a priority return. On December 9, 2009, the House of Representatives approved its version of the Tax Extenders Act of 2009 (H.R. 4213), which includes a provision regarding these types of interests. This change in the law was approved by the House in order to raise revenue to fund the extension of certain expiring tax cuts in the bill. If the Senate also approves this provision as part of any final tax cut extension bill, the President is expected to sign the bill into law.

Under this new provision, all income from an “investment services partnership interest” or “ISPI” will be taxable as ordinary income, without regard to whether that income arises due to an allocation of income, a distribution or a sale of the ISPI. In addition, these amounts generally will be treated as “self-employment” income, and therefore will be subject to payroll tax withholding for Social Security and Medicare under FICA.

An ISPI generally includes any partnership interest (including an interest in any entity, such as a limited liability company, taxable as a partnership) if that interest is issued to a person or related party who, at the time of issuance, is reasonably expected to provide a substantial quantity of any of the following services regarding assets held by the partnership:

- advising as to the advisability of investing in, purchasing or selling any “specified asset”;
- managing, acquiring or disposing of any “specified asset”;
- arranging financing with respect to acquiring any “specified asset”; or
- any activity in support of any of the services described above.

The term “specified asset” means any (i) “security”; (ii) real estate held for rental or investment; (iii) interest in a partnership; (iv) “commodity”; or (v) option or derivative contract with respect to any of the foregoing assets. The term “security” means any (i) corporate stock; (ii) interest in a widely held or publicly traded partnership or trust; (iii) note, bond, debenture or other evidence of indebtedness; (iv) interest rate, currency or equity notional principal contract; or (v) derivative contract or other hedging instrument with respect to any of the foregoing assets. The term “commodity” means any (i) actively traded commodity; (ii) notional principal contract with respect to an actively traded commodity; or (iii) derivative contract or other hedging instrument with respect to any of the foregoing assets.

An interest in a partnership generally will be excluded from being an ISPI if that interest was purchased on the same terms as unrelated, non-service providing investors and the allocations to these other interests are significant compared to the allocations to the interest held by the service provider or a related party. These interests may not be purchased, however, with proceeds of any loans from, or loans guaranteed by, the partnership or any partner or any of their related parties.

These new rules apply to an allocation, distribution or disposition occurring after December 31, 2009, regardless of the date of issuance of the ISPI. In other words, these new income tax provisions do not have any “grandfather” clause exception nor do they otherwise exclude from their application any currently outstanding ISPI.

For many clients who manage real estate investment syndications or other investment funds, these new rules will create a considerable increase in the amount of income tax payable by the general partner or manager at the time of sale or liquidation of the assets of the fund. The income allocated to the general partner or manager, including gain on sale of an interest in the fund, will be taxable at ordinary income tax rates, which currently is up to a federal rate of 35%. In addition, the general partner or manager also will be subject to additional tax for Medicare withholding, which currently is at a rate equal to 2.9% (half of which is deductible). Further, if other employment income of the general partner or manager has not exceeded the wage base cap for Social Security withholding (currently $106,800), then Social Security withholding also will apply up to the wage base cap, which currently is at a rate equal to 12.4% (half of which is deductible). On the other hand, under current law, income related to a “carried interest” that qualifies as long-term capital gain—as opposed to being treated as ordinary income as required in all cases under the proposed law—is taxed at the current maximum federal rate of 15%, and no Medicare or Social Security withholding applies to this income.

If you want to take action regarding this legislation, consider contacting your Senators and urge them to oppose the proposal to tax all income from “carried interests” as ordinary income. If you are concerned with this issue and are an Illinois resident, here are the links for our Senators: Richard Durbin and Roland Burris. If you're a resident of another state, here's a link through which you can reach all Senators: U.S. Senate.

If you have any questions, please contact Richard E. Aderman or Anthony R. Licata.

Pursuant to regulations governing practice before the Internal Revenue Service, unless expressly stated otherwise, any tax advice contained herein cannot be used, and is not intended to be used, by a taxpayer for (i) the purpose of avoiding tax penalties that may be imposed on the taxpayer under the Internal Revenue Code or (ii) the promotion or marketing of any tax-related matter or program.

IL Gaming Board Releases Partial Set of Rules for Legalization of Video Gambling

October 19, 2009

Illinois Gaming NEWS: On October 16, 2009, the Illinois Gaming Board released a partial set of the rules for the legalization of video gambling in the State of Illinois. Please view the Illinois … [ Read More ]

Client Alert: Attorney Communications with Employees

May 14, 2009

The Illinois State Bar Association in January 2009, issued an advisory opinion on professional conduct, permitting a lawyer representing a client adverse to an organization to contact present and … [ Read More ]

Client Alert: Potential Employer Liability for Creating Hostile Environment

May 13, 2009

On April 16, 2009, the Illinois Supreme Court significantly broadened an employer's potential liability for creation of a hostile environment sexual harassment allegedly perpetrated by a … [ Read More ]

Client Alert: Red Scam Alert

April 23, 2009

It has been brought to our attention that a non-governmental firm called “Illinois Corporate Compliance” is contacting Illinois businesses in an attempt to collect a $150 fee to file corporate … [ Read More ]

Client Alert: Proposed Amendment to Illinois Prompt Payment Act's Impact on Retainage Rights

March 24, 2009

Introduced on January 26th of this year, House Bill 0344, which would amend the Illinois Prompt Payment Act, was passed by the Illinois House on February 19, 2009. The bill is presently pending … [ Read More ]

Client Alert: Stimulus Grants to the National Endowment for the Arts

March 20, 2009

The American Recovery and Reinvestment Act of 2009 (ARRA) allocated $50 million to the National Endowment for the Arts (NEA) to be distributed in direct grants to organizations involved in the … [ Read More ]

Client Alert: Changes to COBRA Continuation Health Care Coverage

March 05, 2009

The American Recovery and Reinvestment Act of 2009, commonly known as the economic stimulus package, has made significant changes to COBRA continuation health care coverage rules for the remainder … [ Read More ]

Client Alert: New Illinois Withholding for Pass-Through Entities

March 02, 2009

Illinois has imposed new withholding requirements on all pass-through entities that have Illinois source business income, including partnerships, S corporations, limited liability companies (if … [ Read More ]

Client Alert: American Recovery and Reinvestment Tax Act of 2009, Tax Incentives for Businesses and Individuals

February 17, 2009

We’re sure all our clients have been following the progress of the fiscal stimulus bill through Congress. The bill—titled the American Recovery and Reinvestment Tax Act of 2009—has been signed … [ Read More ]

Bankers' Alert: The Chicago Landmark Ordinance, Lending Implications

February 17, 2009

The Illinois Appellate Court recently remanded to the Cook County Circuit Court a case for further hearings on the constitutionality of the Chicago Landmark Ordinance, as it related to two of the … [ Read More ]

Client Alert: Chicago Landmark Ordinance

February 03, 2009

On Friday, January 30, 2009, the Illinois Appellate Court issued a decision in the case of Hanna v. City of Chicago , which put in question the constitutionality of the Chicago Landmark Ordinance. … [ Read More ]

Client Update: Trusts and Estates 2009 Briefing

January 16, 2009

Significant Opportunities in Today’s Economic Environment The current historic convergence of low interest rates and depressed asset values makes this an excellent time to engage in several … [ Read More ]

Client Alert: Unauthorized Broadcast of Entertainment Events

January 08, 2009

If you are in the hospitality industry and show sporting events or other entertainment programming to your customers, be aware that event promoters are looking for establishments that broadcast … [ Read More ]

Client Alert: Recent Changes to Employment Laws

January 07, 2009

Key changes in state and federal employment laws have taken effect as of January 1, 2009. These changes include amendments to the Americans with Disabilities Act, and state and federal laws … [ Read More ]

Client Alert: President Signs Major Housing Legislation

August 01, 2008

Today, President George W. Bush signed the Housing and Economic Recovery Act of 2008 (the “Act”) into law. The Act will offer up to $300 billion in loans for troubled homeowners and establish a … [ Read More ]

Client Alert: Residential Landlord Tenant Ordinance

June 25, 2008

If you have residential units in the City of Chicago, it’s time to revisit your obligations as a landlord. You may or may not be aware that the City of Chicago has a pro-tenant Residential … [ Read More ]

Client Alert: Illinois Notary Act Amendment

June 10, 2008

On May 30, 2008, the Amendment to Senate Bill 546 was passed by both houses of the Illinois General Assembly, and was sent to the Governor for approval, veto, or amendatory veto. As of June 4, … [ Read More ]

Client Alert: Economic Stimulus Payments

April 10, 2008

The United States Treasury will begin sending economic Stimulus Payments to over 130 million households this May. You are eligible to receive a payment if you have a valid Social Security number, … [ Read More ]

Client Alert: Financial Elder Abuse

March 11, 2008

Elder abuse has been recognized as a serious societal problem in the last few years. It includes physical, sexual, or emotional (such as verbal assault) abuse, confinement, passive neglect, … [ Read More ]

Construction Law Update: Private Prompt Pay Bill

January 22, 2008

On August 31, 2007, Governor Rod Blagojevich signed House Bill 743, the Private Prompt Pay Bill, enacting Public Law 95-567 (the “Act”). This establishes a new law in Illinois governing the … [ Read More ]

Client Alert: Employee Classification Act

January 07, 2008

On January 1, 2008, the Employee Classification Act (the “Act”) became effective. This new Illinois law allows severe penalties to be imposed against construction contractors that … [ Read More ]

Client Alert: Changes to the Illinois Human Rights Act

January 03, 2008

Amendment to the Illinois Human Rights Act Significant changes to the Illinois Human Rights Act became effective on January 1, 2008. The most notable change involves an amendment to the Illinois … [ Read More ]

Client Alert: Deferred Compensation Under Section 409A

December 21, 2007

New rules regarding the taxation of deferred compensation will be effective beginning January 1, 2009. Section 409A of the Internal Revenue Code of 1986, as amended (“Section … [ Read More ]